Question

Oliver wants to start his own business. He should consider a sole proprietorship if he _______.

1) expects rapid growth and wants to be able to raise a large sum of money
2) wants to make it easy to attract qualified employees
3) wants to be his own boss and can accept unlimited liability
4) wants to minimize the financial risk he must accept as the owner of a business

Answer 1

Oliver should consider a sole proprietorship if he wants full control and is willing to accept all personal financial risks associated with the business, including unlimited liability.

Step-by-step explanation:

Oliver should consider a sole proprietorship if he wants to be his own boss and can accept unlimited liability. This business structure allows him to make all the decisions and keep all the profits, but it also means he would be personally responsible for any debts and liabilities the business incurs.

A sole proprietorship is simple to start and manage, and it does not require paying special taxes beyond the income tax on the profits generated. However, raising capital can be challenging since all the funding typically comes from the owner, and the ability to attract qualified employees might also be limited due to the smaller scale and resources of the business.

As opposed to corporations, sole proprietorships do not provide the same level of protection against personal assets in the event of business failure. Given these considerations, the best option for Oliver, based on the question, would be option 3—wanting to be his own boss and can accept unlimited liability.